A public fallout between Tesla CEO Elon Musk and U.S. President Donald Trump triggered a dramatic 14% plunge in Tesla’s stock on Thursday, erasing roughly $150 billion in market value, according to a report by the BBC.
The sharp decline followed escalating tensions between the two, starting with Musk’s opposition to a Trump-backed federal spending bill. What began as a policy disagreement quickly devolved into personal attacks across social media platforms.
In response to Musk’s criticisms, Trump threatened to cancel all federal contracts with Musk’s companies—including SpaceX, which currently holds government deals worth tens of billions of dollars. Musk fired back defiantly, posting: “Go ahead, make my day.”
Market analysts expressed deep concern. Dan Ives of Wedbush Securities called the dispute “jaw-dropping” and warned that continued hostilities could jeopardize Tesla’s regulatory prospects. “This must start to be calmed down,” Ives wrote, cautioning that political instability around Musk could further rattle investors.
Musk’s previously strong relationship with the Trump administration had been a major factor in Tesla’s stock surge last year. He even held a formal role as head of the Department of Government Efficiency and was considered one of Trump’s key private-sector allies.
However, that partnership has recently soured. Musk has faced mounting criticism over his support for controversial spending cuts—particularly in Europe—where backlash has reportedly dented Tesla’s sales.
Investors have also grown uneasy over Musk’s growing political engagement. Rumors swirled last month about a possible CEO replacement at Tesla after Musk announced plans to scale back his government involvement. His resignation from the administration in late May provided temporary relief to shareholders, briefly lifting the stock.
But Thursday’s stock dive erased those gains, following Musk’s renewed attacks on Trump’s spending bill and new tariffs, which he warned could spark a recession. In retaliation, Trump rescinded the nomination of Musk ally Jared Isaacman to head NASA and accused Musk of being upset over the removal of electric vehicle tax credits—key incentives for Tesla’s customer base.
The dramatic fallout marks a significant rupture in what was once seen as a powerful alliance between a leading tech mogul and a sitting president.
Tesla shares closed Thursday at their lowest point since early May.
Investor and longtime Tesla supporter Ross Gerber echoed the sentiment of many shaken shareholders, posting on social media: “Can someone please take the phone away from him? Tesla is getting destroyed.”
